The Deep State (33 page)

6.
Reform tax policy.
“Comprehensive tax reform” is something of a misnomer. What its ardent proponents want is to reduce the nominal corporate income tax rate. The bait is supposed to be a simultaneous reduction of corporate loopholes, but past experience suggests that tax legislation in the hands of these people will lower the top rate (which few corporations with competent tax lawyers pay in any case) but never get around to closing the loopholes. Proposals to eliminate even obvious abuses like the corporate deduction for company aircraft have gone nowhere. It is no surprise that corporate tax collections have fallen to barely more than one-third of their level in 1950 as a percentage of federal revenue. The same problem applies to individual income taxes: hedge fund managers paying taxes at lower personal rates than firemen or nurses is a travesty. But why would a Congress dependent on corporations and the wealthy enact such a change?

If there is enough public outrage, it does bear results: Walgreens drugstores planned in 2014 to move its headquarters to Switzerland. The stores would remain in the United States, but Walgreens would no longer pay U.S. corporate taxes, because of a tax scam called corporate inversion, despite receiving about $17 billion a year from the U.S. taxpayer for filling Medicare and Medicaid prescriptions. Yet popular protests and citizen pressure on Congress caused Walgreens to reverse its decision. It would require a much stronger, sustained level of popular outrage to effect sweeping change in the tax code, but it is not impossible: the late-nineteenth-century populist uprising led to the passage of antitrust laws and other reforms.

7.
Reform immigration policy.
One of the most polarized social issues these days is immigration. Typically, Democrats piously think more immigration is self-evidently marvelous on some principle called diversity, which they can't rationally explain, and that anyone who disagrees is a racist and a xenophobe. The Republicans are split: the foot soldiers hate immigration more than the plague, while business Republicans quietly lobby for as many H-1B work visas as possible in order to depress domestic wages so as to employ a low-paid group of indentured servants (in an outrageous recent case, Disney fired 250 IT workers, replacing them with imported labor, and required the fired employees to train their replacements as a condition of getting severance pay). The culture war that erupted over a recent immigration bill called the Dream Act showed the absurdity of the squabble: 95 percent of the controversy surrounded the parts of the bill providing for a path to citizenship—clearly something constructive must be done to change the status of current undocumented aliens—yet most of the bill's provisions, heavily lobbied for by the technology companies, opened the floodgates both for the H-1B temporary worker visa program and other legal immigration avenues, and these provisions hardly received comment.

Far too many U.S. citizens are unemployed or underemployed in a variety of professions, including highly skilled ones like computer
programming. Corporate CEOs perpetually complain that they cannot find American workers educated enough to fill vacant positions, although they do everything possible to dodge the taxes that fund education and their companies have virtually eliminated the apprenticeship programs that once were common. Work visas should be granted only in limited circumstances, not as a blanket policy to make the labor supply exceed demand at a time of persistent high unemployment. In effect, Washington has allowed corporations to act as human traffickers. Our immigration policy must not be based on spite, but neither should it rest on sentimentality: national interest ought to dictate first what is good for our own people. If America should not colonize the world with its military power, neither should the world colonize America at the behest of corporate interests who don't want to pay our own citizens a living wage.

8.
Adopt a single-payer health care system.
Free-market proponents demand efficiency, whether as the sole criterion for determining an antitrust case, in time-motion studies for hurrying along employees on an assembly line, or in cost-benefit analysis for pollution control. Yet their calls for efficiency fall silent when it comes to a sector that makes up 17.9 percent of our economy: the U.S. health care system. There are many reasons why medicine is simply not amenable to a laissez-faire market system of distribution in the way automobiles or refrigerators are. When the Big One hits you in the chest at three in the morning, and you are hauled away unconscious in the ambulance, it is a bit tricky to shop just then for the highest-quality, lowest-cost hospital.

The reality of health care also refutes Chicago school ideologues who fantasize about the existence of markets based on transparency and “perfect information”: hospitals, clinics, and practitioners do not post a price list the way a restaurant posts a menu. In fact, they charge whatever they're able to con the insurer or Medicare into paying—everyone who has been in a hospital can tell an anecdote about a hundred-dollar Q-tip or some similar outrage on their bill.
Pharmaceutical companies, assisted by Congress, collude in price-fixing. This all comes at a cost: the advanced economies of Western Europe generally spend only half to two-thirds of what the United States spends on health care as a percentage of gross domestic product—with better outcomes, to judge from their superior life-expectancy statistics. And these are generally government-run, single-payer systems. But since that solution is anathema to the free-market crowd, we are stuck with a monstrous hybrid that has neither free-market efficiency and competition nor the inclusiveness and standardization of a national system. A single-payer system would be more efficient and lead to an additional benefit: the 5 or 6 percent of the economy freed up by true health care reform (close to a trillion dollars annually) could go to more worthwhile things than paying for sheer waste in health care, such as research or infrastructure, or could revert back to the long-suffering consumer's pocket.

9.
Abolish corporations' personhood status, or else treat them exactly like persons.
Corporations in America now have it both ways:
Citizens United, Hobby Lobby,
and other rulings now give them virtually all the constitutional attributes of a U.S. citizen: their political bribery is protected as First Amendment speech and their corporate officers' “right” to impose their personal views on their employees is safeguarded by the “free exercise of religion” clause of that amendment. Yet the bedrock legal purpose of a corporation has always been to shield its executives and directors from civil or criminal liability for the firm's wrongdoing—liability that a real person could never dodge. Corporations also enjoy a myriad of tax advantages that actual human beings do not have: can an individual claim personal depreciation as he ages? Of course not. Corporations also benefit from corporate inversion rules that exempt a company from U.S. taxes if it merges with a foreign company and moves its headquarters abroad, even if it continues to generate the vast bulk of its revenue in the United States.

U.S. citizens are still subject to federal tax laws when they reside in
a foreign country. The recently passed Foreign Account Tax Compliance Act contains onerous and intrusive reporting requirements on U.S persons living abroad, with stiff penalties for noncompliance. Corporations are exempt from this law—the same corporations that squirrel away hundreds of billions of dollars in overseas tax havens. Corporate executives need to stop their whining about how the United States, a nation that has historically coddled business interests, is some sort of incipient Bolshevik people's republic. They must face a choice: if they want corporate personhood, accept all the legal burdens of a person; if not, agree to the tax reform in our previous recommendation, which does not grant them aggregate tax benefits greatly exceeding those of a middle-income wage earner. Otherwise, they may want to entertain their libertarian fantasies by incorporating in the laissez-faire playground of Somalia while contemplating how to make up for their lost revenue from being shut out of the U.S. market.

What I have just suggested sounds utopian, even unworldly. But the United States has done more surprising things in its history. One of the most astonishing events of my life was the rapid collapse of the Soviet Union and its empire in Eastern Europe. The Wise Men of Washington, Bob Gates and the rest of his tribe, assumed it to be a well-functioning totalitarian system, cold as ice and unyielding as steel. Yet it crumbled not because of military force or violent revolution. The people who lived there and bore its burdens simply gave up believing in its myths. The United States is far better situated than the Soviet Union ever was, despite our many institutional flaws and the accretion of ideological myths that have impaired our ability to see the world as it is and live sensibly and peaceably within it. The path to a better America will come surprisingly easily when, to paraphrase Abraham Lincoln, we “disenthrall ourselves” from wornout myths and the fears that underlie
them.

Chapter One. Beltwayland

1
. David Brinkley,
Washington Goes to War,
New York: Knopf, 1988.

2
. “How the Most Ideologically Polarized Americans Live Different Lives,” Pew Research Center, June 13, 2014. http://www.pewresearch.org/fact-tank/2014/06/13/big-houses-art-museums-and-in-laws-how-the-most-ideologically-polarized-americans-live-different-lives.

3
. “Ideology and Brand Consumption,”
Psychological Science,
March 15, 2013. http://pss.sagepub.com/content/24/3/326.

4
. Author interview with Andrew Feinstein, London, April 29, 2014. Feinstein is the author of
The Shadow World: Inside the Global Arms Trade,
New York: Farrar, Straus & Giroux, 2011.

5
. “Khalifa Hiftar, the Ex-General Leading a Revolt in Libya, Spent Years in Exile in Northern Virginia,”
Washington Post,
May 20, 2014. http://www.washingtonpost.com/world/africa/rival-militias-prepare-for-showdown-in-tripoli-after-takeover-of-parliament/2014/05/19/cb36acc2-df6f-11e3-810f-764fe508b82d_story.html.

Chapter Two. What Is the Deep State?

1
. “Exclusive: NSA Pays £100m in Secret Funding for GCHQ,”
The Guardian,
August 1, 2013. http://www.theguardian.com/uk-news/2013/aug/01/nsa-paid-gchq-spying-edward-snowden.

2
. “Top Secret America: A Washington Post Investigation,”
Washington Post,
updated September 2010. http://projects.washingtonpost.com/top-secret-america/.

3
. Irving L. Janis,
Groupthink: Psychological Studies of Policy Decisions and Fiascoes,
2nd ed., New York: Houghton Mifflin, 1982.

4
. “U.S. Stock Ownership Stays at Record Low,” Gallup, May 8, 2013. http://www.gallup.com/poll/162353/stock-ownership-stays-record-low.aspx.

5
. “
Executive Compensation Data Firm Equilar Releases Annual CEO Pay
Study,” Equilar, April 13, 2014. http://www.equilar.com/press-releases/23-annual-ceo-pay-study.html.

6
. “Median Income Rises, but Is Still 6% Below Level at Start of Recession in '07,”
New York Times,
August 21, 2013. http://www.nytimes.com/2013/08/22/us/politics/us-median-income-rises-but-is-still-6-below-its-2007-peak.html?

Chapter Three. Bad Ideas Have Consequences

1
. Robert Mann,
A Grand Delusion: America's Descent into Vietnam,
New York: Basic Books, 2001.

2
. The memorandum is available on the website of the Washington and Lee University School of Law. http://law.wlu.edu/powellarchives/page.asp?pageid=1251.

3
. “Business: Ford's Rolls-Royces,”
Time,
July 8, 1940. http://content.time.com/time/magazine/article/0,9171,795076,00.html.

4
. Dan Avnon and Avner de-Shalit,
Liberalism and Its Practice,
London and New York: Routledge, 1998.

5
. “U.S. Manufacturing Surges Ahead—but Don't Look for a Factory Job,”
Forbes,
August 22, 2011. http://www.forbes.com/sites/jonbruner/2011/08/22/u-s-manufacturing-surges-ahead-but-dont-look-for-a-factory-job-infographic/.

6
. Simon Johnson and James Kwak,
13 Bankers: The Wall Street Takeover and the Next Financial Meltdown,
New York: Vintage, 2011.

7
. Madeleine Albright,
Madam Secretary: A Memoir,
New York: Miramax, 2003.

8
. “Transcript: Albright Interview on NBC-TV,” February 19, 1998. http://www.fas.org/news/iraq/1998/02/19/98021907_tpo.html.

Chapter Four. Do Elections Matter?

1
. “West Virginia Puzzled, Outraged over Chemical Leak,”
Los Angeles Times,
January 16, 2014. http://articles.latimes.com/2014/jan/16/nation/la-na-chemical-danger-20140117.

2
. “With Bags of Cash, C.I.A. Seeks Influence in Afghanistan,”
New York Times,
April 28, 2013. http://www.nytimes.com/2013/04/29/world/asia/cia-delivers-cash-to-afghan-leaders-office.html.

3
. “80 Percent of Americans Don't Trust the Government. Here's Why,”
The Atlantic,
April 19, 2010. http://www.theatlantic.com/business/archive/2010/04/80-percent-of-americans-dont-trust-the-government-heres-why/39148/.

4
. “Congress Less Popular than Cockroaches, Traffic Jams,” Public Policy
Polling, January 8, 2013. http://www.publicpolicypolling.com/main/2013/01/congress-less-popular-than-cockroaches-traffic-jams.html.

5
. “A Long, Steep Drop for Americans' Standard of Living,”
Christian Science Monitor,
October 19, 2011. http://www.csmonitor.com/Business/2011/1019/A-long-steep-drop-for-Americans-standard-of-living.

6
. “US Election: How Can It Cost $6bn?” BBC News, August 2, 2012. http://www.bbc.com/news/magazine-19052054.

7
. “Scholar Behind Viral ‘Oligarchy' Study Tells You What It Means,”
Talking Points Memo,
April 22, 2014. http://talkingpointsmemo.com/dc/princeton-scholar-demise-of-democracy-america-tpm-interview.

8
. Kenneth P. Vogel,
Big Money: 2.5 Billion Dollars, One Suspicious Vehicle, and a Pimp—On the Trail of the Ultra-Rich Hijacking American Politics,
New York: Public Affairs, 2014.

9
. “Alan Grayson Lets Both Parties Have It: ‘People's Lives Are Circling the Drain, and Nobody's Even Talking About It,'”
Salon
, July 9, 2015. http://www.salon.com/2015/07/09/alan_grayson_lets_both_parties_have_it_peoples_lives_are_circling_the_drain_and_nobodys_even_talking_about_it/.

10
. “The Big Lobotomy: How Republicans Made Congress Stupid,”
Washington Monthly,
June/July/August 2014. http://www.washingtonmonthly.com/magazine/junejulyaugust_2014/features/the_big_lobotomy050642.php.

11
. “House Press Offices Expand as Other Staffs Shrink,”
USA Today,
July 1, 2014. http://www.usatoday.com/story/news/politics/2014/07/01/house-staff-cuts-communications-press/11425389/.

12
. Joshua L. Kalla and David E. Broockman, “Congressional Officials Grant Access to Individuals Because They Have Contributed to Campaigns: A Randomized Field Experiment,” 2014. http://web.archive.org/web/20150708051134.

13
. “What Israel's Chief of Staff Is Worried About—No, It's Not Iran,”
Forward,
May 26, 2015. http://forward.com/opinion/israel/308757/the-top-priority-of-israels-chief-of-staff-and-no-its-not-bombing-iran/.

14
. “How the GOP Became the Israel Party,”
American Conservative,
April 8, 2015. http://www.theamericanconservative.com/articles/how-the-gop-became-the-israel-party/.

15
. “Senator Lindsey Graham Meeting in Israel with PM Netanyahu,” Fox News, December 27, 2014. http://gretawire.foxnewsinsider.com/2014/12/27/senator-lindsey-graham-meeting-in-israel-with-pm-netanyahu-click-for-transcript/.

16
. “Adelson to Keep Betting on the GOP,”
Wall Street Journal,
December 4, 2012. http://www.wsj.com/articles/SB10001424127887323717004578159570568104706.

17
. “Paul Singer: This Is the New ‘Big Short,'” CNBC, May 28, 2015. http://www.cnbc.com/id/102715625.

18
. “G.O.P.'s Israel Support Deepens as Political Contributions Shift,”
New York Times,
April 4, 2015. http://www.nytimes.com/2015/04/05/us/politics/gops-israel-support-deepens-as-political-contributions-shift.html.

19
. “McAllister Admits to Casting Vote for Money,”
Ouachita Citizen,
June 6, 2014. http://www.hannapub.com/ouachitacitizen/news/local_state_headlines/article_8a017c20-ed41-11e3-b622-0017a43b2370.html.

20
. “Bernanke Cashes In,” CNBC, May 22, 2014. http://video.cnbc.com/gallery/?video=3000278038.

21
. “Transformation, Like Reagan,”
Politico,
January 16, 2008. http://www.politico.com/blogs/bensmith/0108/Transformation_like_Reagan.html.

22
. “A Fisher King in the White House,”
Full Stop,
July 9, 2013. http://www.full-stop.net/2013/07/09/blog/meagan-day/a-fisher-king-in-the-white-house/.

23
. “The Making of Hillary 5.0: Marketing Wizards Help Re-Imagine Clinton Brand,”
Washington Post,
February 21, 2015. http://www.washingtonpost.com/politics/the-making-of-hillary-50-marketing-wizards-help-reimagine-clinton-brand/2015/02/21/bfb01120-b919-11e4-aa05-1ce812b3fdd2_story.html.

24
. Bob Woodward,
The Agenda: Inside the Clinton White House,
New York: Simon & Schuster, 1994.

25
. “Why I Am Cancelling My Documentary on Hillary Clinton,”
Huffington Post,
September 30, 2013. http://www.huffingtonpost.com/charles-ferguson/hillary-clinton-documentary_b_4014792.html.

26
. “The Bill and Hillary Clinton Money Machine Taps Corporate Cash,”
Wall Street Journal,
July 1, 2014. http://www.wsj.com/articles/the-bill-and-hillary-clinton-money-machine-taps-corporate-cash-1404268205.

27
. Lou Dubose and Jake Bernstein,
Vice: Dick Cheney and the Hijacking of the American Presidency,
New York: Random House, 2006.

28
. James Mann,
Rise of the Vulcans: The History of Bush's War Cabinet,
New York: Penguin, 2004.

29
. “‘Torture Report': A Closer Look at When and What President Bush Knew,” National Public Radio, December 16, 2014. http://www.npr.org/sections/thetwo-way/2014/12/16/369876047/torture-report-a-closer-look-at-when-and-what-president-bush-knew.

30
. “The Golf Address,”
New York Times,
August 23, 2014. http://www.nytimes.com/2014/08/24/opinion/sunday/maureen-dowd-the-golf-address.html.

31
. “Gates Conceals Real Story of ‘Gaming' Obama on Afghan War,” Inter Press Service, January 10, 2014. http://www.ipsnews.net/2014/01/gates-conceals-real-story-gaming-obama-afghan-war/.

32
. Ibid.

33
. “U.S. Model for a Future War Fans Tensions with China and Inside Pentagon,”
Washington Post,
August 1, 2012. http://www.washingtonpost.com/world/national-security/us-model-for-a-future-war-fans-tensions-with-china-and-inside-pentagon/2012/08/01/gJQAC6F8PX_story.html.

34
. “The Trillion Dollar Nuclear Triad,” James Martin Center for Nonproliferation Studies, January 2014. http://cns.miis.edu/opapers/pdfs/140107_trillion_dollar_nuclear_triad.pdf.

35
. “This Could Be the Most Dominant Republican Congress Since 1929,”
Washington Post,
November 3, 2014. http://www.washingtonpost.com/blogs/the-fix/wp/2014/11/03/this-could-be-the-most-dominant-republican-congress-since-1929.

36
. “Stop Whining, I'm Your Friend,”
The Economist,
August 9, 2014. http://www.economist.com/news/united-states/21611140-president-wants-ceos-play-ball-he-might-have-change-his-own-language-stop.

Chapter Five. Does Our Defense Actually Defend America?

1
. “A Review of FBI Security Programs,” Commission for Review of FBI Security Programs, v.s. Department of Justice, March 2002. http://www.fas.org/irp/agency/doj/fbi/websterreport.html.

2
. “The Golden Age of Black Ops,”
Huffington Post,
January 20, 2015. http://www.huffingtonpost.com/nick-turse/black-ops_b_6507142.html.

3
. “America's $1 Trillion National Security Budget,” Project on Government Oversight, March 13, 2014. http://www.pogo.org/our-work/straus-military-reform-project/defense-budget/2014/americas-one-trillion-national-security-budget.html.

4
. “U.S. Military Spending Dwarfs Rest of World,” NBC News, February 24, 2014. http://www.nbcnews.com/storyline/military-spending-cuts/u-s-military-spending-dwarfs-rest-world-n37461.

5
. “How Much Does the Pentagon Pay for a Gallon of Gas?”
National Defense,
April 2010. http://www.nationaldefensemagazine.org/archive/2010/April/Pages/HowMuchforaGallonofGas.aspx.

6
. “U.S., Djibouti Reach Agreement to Keep Counterterrorism Base in Horn of Africa Nation,”
Washington Post,
May 5, 2014. http://www.washingtonpost.com/politics/us-djibouti-reach-agreement-to-keep-counterterrorism-base-in-horn-of-africa-nation/2014/05/05/0965412c-d488-11e3-aae8-c2d44bd79778_story.html.

7
. “Chaos in Tower, Danger in Skies at Base in Africa,”
Washington Post,
April 30, 2015. http://www.washingtonpost.com/world/national-security/miscues
-at-us-counterterrorism-base-put-aircraft-in-danger-documents-show/2015/04/30/39038d5a-e9bb-11e4-9a6a-c1ab95a0600b_story.html.

8
. “Billions from Beijing: Africans Divided over Chinese Presence,”
Der Spiegel,
November 29, 2013. http://www.spiegel.de/international/world/chinese-investment-in-africa-boosts-economies-but-worries-many-a-934826.html.

9
. “China and Africa: What the U.S. Doesn't Understand,” CNN, July 2, 2013.http://management.fortune.cnn.com/2013/07/02/china-africa-us/.

10
. David E. Brown,
AFRICOM at 5 Years: The Maturation of a New U.S. Combatant Command,
Strategic Studies Institute, U.S. Army War College, August 2013. http://www.strategicstudiesinstitute.army.mil/pdffiles/PUB1164.pdf.

11
. Thomas E. Ricks,
The Generals: American Military Command from World War II to Today,
New York: Penguin, 2012.

12
.
Alternatives for Modernizing U.S. Fighter Forces,
Congressional Budget Office, May 2009. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/101xx/doc10113/05-13-fighterforces.pdf.

13
. “The Troubled F-35,”
The Week,
August 8, 2014 (print edition).

14
. “Before Shooting in Iraq, a Warning on Blackwater,”
New York Times,
June 29, 2014. http://www.nytimes.com/2014/06/30/us/before-shooting-in-iraq-warning-on-blackwater.html.